Multidimensional Poverty Measurement

Understanding Poverty Beyond Income

For decades, poverty was primarily measured through income-based metrics, typically using an international poverty line such as $1.90 per day. While this provides valuable insights into extreme economic deprivation, it fails to capture the complex, multifaceted reality of poverty experienced by billions worldwide. Multidimensional poverty measurement has emerged as a more comprehensive approach to understanding human deprivation by accounting for the various overlapping disadvantages individuals and communities face.

The Evolution of Poverty Measurement

The concept of multidimensional poverty gained traction through the work of economist Amartya Sen, who introduced the capability approach. This framework posits that poverty should be understood not merely as lack of income, but as the deprivation of basic capabilities that enable individuals to lead lives they value. Sen's work laid the foundation for the development of the Human Development Index (HDI) and later the Multidimensional Poverty Index (MPI).

Since then, numerous international organizations, including the United Nations Development Programme (UNDP), World Bank, and Oxford Poverty & Human Development Initiative (OPHI), have refined methodologies for measuring poverty in multiple dimensions, providing policymakers with more nuanced information to address deprivation.

Key Dimensions of Poverty

Multidimensional poverty measurement typically incorporates indicators across several core dimensions of human well-being:

Additional dimensions sometimes incorporated include employment, social protection, security, empowerment, and environmental quality, depending on context and purpose of measurement.

Methodologies for Measuring Multidimensional Poverty

Global Applications of Multidimensional Poverty Measurement

Multidimensional poverty measures have been adopted by numerous countries to better understand and address deprivation:

• The Global MPI provides internationally comparable measures covering over 100 developing countries
• More than 40 countries have developed their own national multidimensional poverty indices, adapted to their specific contexts and priorities
• Mexico's official multidimensional poverty measure serves as a foundation for social policy development and evaluation
• Bhutan's Gross National Happiness index incorporates multidimensional wellbeing measures
• India's national multidimensional poverty index, based on the Alkire-Foster method, has informed poverty reduction strategies

Advantages of Multidimensional Poverty Measurement

By capturing the complexity of poverty, multidimensional approaches offer several advantages:

• Comprehensive understanding - Recognizes overlapping deprivations that income measures miss
• Better policy targeting - Enables more precise identification of vulnerable groups and their specific needs
• Improved program design - Helps develop interventions that address multiple dimensions simultaneously
• More accurate monitoring - Allows evaluation of progress across multiple aspects of wellbeing
• Greater transparency - Makes visible deprivations that might otherwise remain hidden

Challenges and Limitations

Despite its advantages, multidimensional poverty measurement faces several challenges:

• Data availability - Requires household surveys including multiple indicators, which may be unavailable or outdated in some contexts
• Indicator selection - Choices about which dimensions and indicators to include involve subjective judgments
• Weighting decisions - Determining relative importance of different dimensions remains a methodological challenge
• Complexity - More difficult to communicate to policymakers and the public compared to single monetary measures
• Resource constraints - Regular implementation requires significant statistical capacity and resources

Case Studies in Measurement and Application

The MPI in Sub-Saharan Africa

In many Sub-Saharan African countries, the MPI reveals that individuals may be classified as non-poor by income measures yet experience significant deprivations in health, education, and living standards. For example, in Nigeria, while monetary poverty might indicate certain improvements, the MPI highlights persistent challenges in healthcare access, educational attainment, and basic infrastructure, calling for more comprehensive poverty reduction strategies.

Latin America's Pioneering Approach

Latin American countries have been pioneers in adopting multidimensional poverty measures. Chile's Multidimensional Poverty Index, for instance, captures deprivations across education, health, housing, and social protection, enabling more targeted social policies and more accurate tracking of progress.

Toward More Comprehensive Measurement

As multidimensional poverty measurement evolves, several developments are expanding its scope and utility:

• Time-use dimensions - Incorporating unpaid domestic work and time poverty indicators
• Disaggregation and intersectionality - Examining how poverty varies by gender, age, ethnicity, disability, and geography

• Quick Facts

  Global Statistics

  • Approximately 1.3 billion people worldwide are multidimensionally poor
  • 84% of multidimensionally poor people live in Sub-Saharan Africa and South Asia
  • Children account for roughly one-third of multidimensionally poor people globally

  Key Milestones

  • 1990: Human Development Index introduced
  • 2007: Alkire-Foster method developed
  • 2010: Global MPI launched
  • 2015: SDGs reference multidimensional poverty measurement

  Further Reading

  • Alkire, S. & Foster, J. (2011). Counting and multidimensional poverty measurement. Journal of Public Economics, 95(7-8).
  • United Nations Development Programme. Human Development Reports.
  • Sen, A. (1999). Development as Freedom. Oxford University Press.
  • OPHI (Oxford Poverty and Human Development Initiative) Working Papers.